Jack Townsend offers this blog on Federal Tax Crimes principally for tax professionals and tax students. It is not directed to lay readers -- such as persons who are potentially subject to U.S. civil and criminal tax or related consequences. LAY READERS SHOULD READ THE PAGE IN THE RIGHT HAND COLUMN TITLE "INTENDED AUDIENCE FOR BLOG; CAUTIONARY NOTE TO LAY READERS." Thank you.

Tuesday, April 7, 2015

Ooooops! Indictment Is One Day Late! Government Confesses Error (4/7/15)

In United States v. Johnson, 2015 U.S. App. LEXIS 5446 (6th Cir. 2015) (nonprecedential), here, pursuant to a Government concession that the indictment was one day late, the Court dismissed the indictment. The Government's concession was made in its answering brief on appeal, here.

The facts were (according to the Government's brief):

Defendant filed his 2006 federal individual income return on February 17, 2007. (G.Ex. 1-1.) On April 16, 2013, a grand jury returned an indictment charging defendant with one count of willfully filing a false 2006 federal individual income tax return, in violation of 26 U.S.C. § 7206(1). (R.1: Indictment, #1-2.)

Section 6531, here, provides a six-year statute of limitations for various criminal offenses, including § 7206(1), tax perjury, here. See § 6531(5). Tax perjury relates to the filing of the return. So, the six-year period would, logically, commence on the date the return was filed.

A return filed before the due date for the return is deemed filed on the due date of the return. § 6513(a), here, for purposes of the six-year statute for tax perjury. See United States v. Habig, 390 U.S. 222 (1968). In Johnson, the return was filed on February 17, 2007, thus clearly invoking § 6513(a) and Habig that it was deemed filed on the due date of the return, April 15, 2007. Focusing only on the due date of the return, the subsequent indictment on April 16, 2013 was untimely.

What confused the Government and the trial court was the application of § 7503, here, which provides that, where the due date falls on a weekend or holiday, a return filed on the next succeeding business day is "considered timely." In Johnson, April 15, 2007 fell on a Saturday, thus making returns filed on April 17, 2007, a Monday, "considered timely." But, from a statutory interpretation standpoint, it did not change the statutorily imposed due date for the return. Accordingly, the Government conceded on appeal that Johnson's early filed return was deemed filed on the due date pursuant to § 6513(a).

That's pretty much it. The result would be different had § 7503 provided that the due date is extended where the original due date falls on a weekend or a holiday.

So, the bottom line, the defendant walks away from a criminal conviction because of a statute of limitations footfault. The order of restitution of $531,000 will also be vacated, but the IRS should have the deficiency procedures and the unlimited civil statute of limitations for fraud to collect any tax due.

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